Nicholson remembers J. Nicholson, who built residents at fuel stop at which they could sell their wood to the railroad. The city originally incorporated in 1907, but from the Great Depression years to the 1970s, it suffered a period of stagnation. In 1972, Nicholson began to revive as poultry production encouraged local economic development.

Nicholson's annual events include May's Daisy Festival and the July 4 celebration.

Famous city residents include country singer Kenny Rogers and actress Tammy Luthi Retzlaff.